PEPE's Bearish Downtrend and Strategic Liquidation Levels: A Tactical Play for Short-Term Positioning

The memecoin sector, once a bastion of speculative fervor, has entered a prolonged bearish phase in 2025, with PEPE (PEPE) emblematic of this broader trend. Despite a 75% decline in 2025 and a 19% drop in the past week alone, the token remains a focal point for traders seeking tactical opportunities amid volatile conditions. This analysis synthesizes technical and on-chain sentiment data to evaluate PEPE's bearish trajectory and identify strategic liquidation zones for short-term positioning.

Technical Analysis: Bearish Momentum and Key Levels

PEPE's price action over the past week underscores a continuation of downward pressure. The MACD indicator remains bearish, with the signal line above the MACD line and a histogram dominated by red bars, signaling sustained selling pressure. The RSI, hovering between 31–35, further confirms weak buying interest, suggesting the token is in oversold territory but not necessarily poised for a reversal.

Support and Resistance Dynamics:
- Critical Support: The $0.00000068 level has repeatedly failed to hold, with the price dropping to $0.0000005281 in recent sessions. A break below this level could trigger further declines toward $0.000000455–$0.000000470, as highlighted in Bybit's analysis.
- Key Resistance: Immediate resistance lies at $0.00000080, followed by $0.000000520 and $0.000000550. A confirmed close above $0.000000490 could signal a short-term rally, though analysts caution that false breakouts are common in low-liquidity environments.

Diverging Outlooks:
While a 12–15% short-term bounce is anticipated due to a bullish Stochastic RSI crossover and potential short-squeeze activity around $0.000005–$0.0000055, a more optimistic projection envisions a 1,500% rally to $0.00012 by early 2026. This scenario hinges on a Fibonacci extension pattern and a descending wedge breakout, though such a move would require a dramatic shift in market sentiment.

On-Chain Sentiment: Accumulation, Liquidation, and Investor Behavior

On-chain data reveals a complex interplay between speculative trading and institutional accumulation. Active addresses surged by 150% in 2025, reflecting growing participation beyond retail speculation. Meanwhile, whale investors have accumulated over 4 trillion PEPE coins since February 2025, with a $165 million token movement historically correlating with significant price action.

Liquidation Zones and Market Sentiment:
- Discount Zone Activity: In October 2025, PEPE entered a "discount zone," where sell-side liquidity was tapped, and leveraged long positions were flushed out. Analysts like Carl Moon suggest this could set the stage for a reversal if buy-side liquidity remains balanced.
- Key Buy-Side Levels: On Bybit's weekly chart, critical buy-side zones are identified between $0.00000656 and $0.00001632. These levels represent areas where traders could optimize stop-loss strategies and adjust positions based on real-time liquidation heatmaps.

Liquidity and Volatility:
Trading activity remains concentrated in perpetual futures, with limited DeFi participation. The Crypto Fear & Greed Index currently reflects extreme fear, amplifying the likelihood of erratic price swings. This environment underscores the importance of combining technical indicators (e.g., RSI, Funding Rates) with on-chain liquidity data to avoid being caught in sudden liquidation cascades.

Strategic Positioning: Navigating Liquidation Zones

For short-term traders, the interplay between technical levels and on-chain liquidity offers actionable insights:

1. Short-Term Bounce Potential:
2. A bullish divergence on the RSI and higher-than-average buy volume suggest a 10–20% upside potential if PEPE stabilizes above $0.00000490. However, this scenario depends on Bitcoin's momentum and broader market conditions.

3. Traders should monitor the $0.00000068 support level closely. A rebound here could trigger a test of $0.00000080 resistance.

4. Liquidation-Driven Opportunities:

5. Liquidation heatmaps indicate that red zones (short liquidations) are concentrated above $0.00000070, while green zones (long liquidations) dominate below $0.00000055. These zones can act as dynamic support/resistance levels, offering entry points for contrarian trades.

6. A breakout above $0.000000520 with above-average volume could validate a short-term rally, but failure to hold this level may reignite bearish momentum.

7. Risk Management:

8. Given the token's volatility, stop-loss orders should be placed below key support levels (e.g., $0.000000455) to mitigate downside risk.
9. Position sizing should reflect the high-risk nature of memecoins, with a focus on capital preservation amid potential false breakouts.

Conclusion

PEPE's bearish downtrend remains intact, supported by bearish MACD readings, weak RSI levels, and on-chain liquidation data. While short-term bounces are possible, particularly around $0.00000068 and $0.000000490, the broader outlook hinges on whale accumulation and macroeconomic factors. Traders seeking tactical opportunities must balance technical analysis with on-chain liquidity insights, using liquidation zones as both cautionary signals and potential entry points. As the market navigates extreme fear, disciplined risk management will be paramount to capitalizing on PEPE's volatile trajectory.